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Belgium - Banking
Belgium reportedly has the largest number of banking branches per head of any country in the world; for example, KBC Brussels alone has 60 branches in the capital. This is possible because personal banking in Belgium is expensive compared to other European and the US personal banking industries. Charges are levied on all bank account transactions, some ATM transactions, for access to internet banking services and for the provision of debit and credit cards. Most banks will put all the charges into one package for an annual fee, for which they will often add an additional insurance product as an extra benefit.
However, most banks in Belgium are following a branch reduction programme. Between 2010 and 2013, the average Belgian bank closed 2-3% of its branches; since then the average has been close to 5% each year. If you are considering a move to the countryside, you cannot be certain that several bank branches will remain within an easy travelling distance in the medium and long term.
Internet banking is widespread, and some banks operate entirely online. It is usually possible to cover a whole range of processes online, from opening accounts to making payments and accessing investment services.
The main banks providing personal banking accounts in Belgium are:
• BNP Paribas Fortis
• KBC Groep
• Citibank Belgium
• AXA Bank Belgium
Corruption in Belgium is at a low level and causes public disapproval where it is unearthed; an example was the high profile 2005 arrest of three public officials in Binche for bribery, misuse of personnel and inappropriate expenses, which was widely reported in the country. The financial and administration systems are generally sound, although the fairly large financial services industry in the country did get caught by the global financial collapse of 2008, with the Belgian government having to take significant action including the bail out, nationalisation and selling off of some of the country’s banks; this has brought Belgium’s national debt back up to the levels it had spent almost twenty five years reducing through budgetary discipline. The capital and liquidity position of Belgian banks is now significantly improved thanks to this package of financial support, the government guarantee of bank deposits of individuals to an increased value of €100,000, and a significant reform of the supervisory and regulatory framework. The financial systems have been largely retrenched to less risky core business activities and markets, although the banking industry is unhappy with this strategy as it leads to lower rewards.
When you are applying to open a bank account, the bank is required to check your identity and to follow regulatory procedures to ensure you are not laundering money. Therefore you will need to show your passport to the relevant banking staff, with official identification showing your place of residence. Some of the larger banks offering expat services will allow you to open an account before you move to Belgium; once you have moved to your new home, you will need to promptly advise them of your new address.
Three banks which offer an expat desk in Brussels are:
A current or checking account is called a “compte à vue” in French speaking areas and a “zichtrekening” in Flemish speaking areas.
Once the account is opened you will be issued with an pin number protected ATM card, which is usually a Bancontact/Mister Cash debit card. This means a four digit code - a pin - will be sent to you by post; you must memorise it and destroy the paper code, so that you are the only person who can input the code into an ATM or shop terminal. The card can be used to access cash from ATM machines, which are located outside each bank branch. Bancontact/Mister Cash cards also contain a Proton chip; a balance is loaded onto the chip at a cash dispenser, and then used at retail outlets up to the value of €15 as a contactless payment; amounts over this will require the pin. Cashless technology has been used in Belgium since 1995, but the Proton is falling out of favour because balances on lost cards cannot be restored and pin technology now protects all debit and credit cards across the country.
In Belgium most types of credit card are widely accepted, including Visa and American Express, but credit cards are usually only available from larger banks. Most banks offer a Visa or Mastercard to their customers; these cards require the full balance to be paid in full each month. Household debt at 60% of GDP is close to, but below, the European average; this is significantly due to the buoyancy of the housing market over the past 20 years (despite a mortgage lending regime which was prudent even before 2008) and the tax benefits of holding a mortgage, rather than debt accrued through personal consumption.
Cheques are now rarely used, and attract high bank charges.
Whilst the majority of the population will have access to online banking, a bank transfer for those without it can be done via an orange and white payment slip called a “virement” in French speaking banks and a “overschrijving” in Flemish banks. Most regular payments will be done by direct debit or standing order.
Banks offer savings accounts and these are the preferred investment vehicles for Belgian households, who tend to avoid riskier investments especially as the regulated savings accounts are favoured by the tax framework.
Most banks will be happy to give you an overdraft, as long as you can prove your ability to repay it and to pay the costs the overdraft will incur. They may ask you to provide your contract of employment or three consecutive payslips before they make a decision.
If you need to take out a personal loan, many banks will be able to offer them. As an example, this KBC Brussels website in English offers a personal loan page which explains the minimum and maximum loan limits they will consider, clear and accessible terms and conditions, and even an online calculator to show what the repayments will cost according to the amount borrowed and the term of repayment.
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